On June 21, 2018, the US Supreme Court ruled that economic activity happening in specific states is subject to transactional tax collection. For SaaS companies like CallRail, this means we’re required to collect and remit applicable sales taxes. This tax obligation, otherwise known as a sales tax nexus, establishes tax collection terms on a state-by-state basis to determine the sales tax customers pay for digital services like CallRail.
For more information on this Supreme Court decision, please see this helpful, third-party article: South Dakota v. Wayfair Inc.
Use this document as a resource for commonly asked questions about sales tax. This document is not intended to be used as legal advice. If you have specific questions regarding compliance in your state, we recommend working closely with your legal counsel and other professional advisers to ensure you are compliant.
FAQs
Will I be charged tax?
The list of states charging sales tax changes every quarter, and we’re updating this list as we receive information. As of September 1, 2020, you will be charged sales tax if you live in the following states:
| Arizona |
| Connecticut |
| Iowa |
| Massachusetts |
| New York |
| Ohio |
| Pennsylvania |
| South Carolina |
| South Dakota |
| Tennessee |
| Texas |
| Utah |
| Washington |
| West Virginia |
As a guideline, state sales tax rates can be as high as 14%, and the national average is roughly 7%. This third-party resource can provide greater detail on sales tax laws by state.
Can you provide an estimate of what my taxes will be?
We won’t be able to provide an accurate estimate of your sales tax since not all services are taxable in all states. Additionally, sales tax is dependent upon your invoice amounts, which can vary from month to month based on the services you’re subscribed to and your usage of those services.
How will CallRail determine how much sales tax I pay?
We’ve partnered with a tax compliance agency and calculate sales tax based on the zip code associated with the credit card on your account. Our tax partner’s system uses tax laws developed by each state charging sales tax, and drills down to the lowest level available (zip codes, municipalities, etc.) to determine your exact sales tax rate.
To ensure you’re invoiced the correct tax rate, double-check that the credit card number on file for your account has the correct billing address and zip code. Here’s how an Administrator on your account can see which credit card number we’re using to determine sales tax for your account:
- Click the Account icon in the top left corner of your account to open the My Account panel, then click Manage Account.
- You’ll be taken to the Billing page, where you can confirm or edit the credit card number on file for this account. If you need to edit the credit card on file, click the pencil icon to enter your new credit card number.
What should I expect to pay if I’m managing multiple accounts with Account Center?
Since there’s not a way for us to invoice customers through Account Center, we’ll use the credit card number on individual accounts to determine sales tax. Use the instructions in the previous question to see which credit card is on file for individual accounts you manage.
What if my business is a reseller or tax-exempt?
If your business is a 501(c)3 organization, please email your account number and your federal or state proof or certification of your 501c3 status to tax@callrail.com.
If you are a reseller and have a tax-exempt certificate, please email it along with your account number to tax@callrail.com.